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Suominen Corporation’s Financial Statement’s Release for 1 Jan – 31 Dec, 2015: Net sales and operating profit of financial year 2015 improved markedly from the comparison period

Highlights in October– December 2015:

- Net sales remained at the level of the corresponding period, at EUR 104.2 (104.8) million.
- Operating profit excluding non-recurring items fell by 32% to EUR 4.3 (6.2) million).
- The execution of all initiatives in the growth investment program advanced on three continents.
- Suominen’s Care business area launched in total three new nonwovens products to the market.

- Suominen expects that for the full year 2016, its net sales and operating profit excluding non-recurring items will improve from year 2015. In 2015, Suominen’s net sales amounted to EUR 444.0 million and operating profit excluding non-recurring items to EUR 31.2 million. The non-recurring items are explained in the disclosures of this Financial Statement release.

- Suominen’s Board of Directors proposes to the Annual General Meeting EUR 0.02 per share dividend distribution from the financial year 2015. On 29 January 2016 the company had 251,511,730 issued shares, excluding treasury shares. With this number of shares, the total amount of dividends to be distributed would be EUR 5,030,234.60.

President & CEO Nina Kopola comments on Suominen’s fourth quarter of 2015 and full financial year:

“North America and Europe are Suominen’s main market areas. In the US, the consumer confidence index declined slightly, but remained at a good level. In the euro area, the index rose marginally in the fourth quarter and was clearly at a higher level than it was in the comparison period.

In South America, particularly in Brazil, the accelerated economic growth of recent years reversed. Contrary to what one might think, this was not reflected in our business operations in the area. The Paulínia plant in Brazil was integrated into Suominen in early 2014, and since then we have proceeded in the South American market as planned.

Suominen’s financial development during the full 2015 financial year corresponded to our positive outlook, which we updated in October, even though the fourth quarter development fell short of expectations as some customers postponed their orders until after the turn of the year. Suominen’s Q4 net sales were down 0.5% from the comparison period and totaled EUR 104.2 million. Net sales for the year increased 10.5% to EUR 444.0 million, thanks to the strengthening US dollar.

Suominen’s operating profit excluding non-recurring items fell 32% during the quarter to EUR 4.3 million. Operating profit in Q4 was weakened by the expenses related to development projects in progress, among other things. Profit for Q4 was EUR 1.9 million. Suominen’s operating profit for the full financial year, excluding non-recurring items, improved markedly from the comparison period and stood at EUR 31.2 million in 2015, corresponding to 7.0% of net sales. Cash flow from operations was strong as expected in 2015, at EUR 27.3 million.

Earnings per share in 2015 were EUR 0.06. Suominen’s Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.02 per share be paid for the financial year 2015. The proposal is in line with the dividend policy announced by the Board of Directors in autumn 2014.

Suominen’s Board of Directors has set three medium-term financial targets for the company. In 2015, the return on investments was 15.9% (target level >12%) and our gearing ratio was 25.9% (target level 40–80%). We did not achieve our third target of organic net sales growth at a rate faster than the industry average (approx. 3%). Suominen’s net sales grew organically, and excluding the effect of exchange rates, approximately 1% in the financial year 2015.

With the close of 2015, we left the first third of our strategy period behind us. I am pleased that we made progress on many fronts during the year in terms of implementing measures to support our growth strategy. Our central themes for 2015 were making progress in our roughly EUR 60 million growth investment program and focused efforts to enhance our product development process.

In the final quarter of the year we completed equipment installations on two investment projects. The machinery base of our plants in Paulínia, Brazil, and Alicante, Spain, was modernized so that both plants will now be able to manufacture also medical nonwovens and other products with higher added value. The largest project in our growth investment program, a new production line at the Bethune plant in the US, proceeded according to plan in the fourth quarter. The installation in Bethune is expected to be completed in the second half of 2016.

Our investments in product development already began to show in 2015. We introduced a total of six new nonwoven products with higher added value, three of which –  FIBRELLA® Move, FIBRELLA® Zorb and FIBRELLA® Zorb+, all for use in hygiene products – were launched in Q4.

At the end of 2015, we received new proof of Suominen’s financial turnaround when Nasdaq Helsinki changed Suominen’s market cap segment from Small Cap to Mid Cap as of 4 January 2016. At the close of the financial period, Suominen’s market value stood at EUR 312 million.

In 2016, we will continue with our focused efforts to implement our strategy, with the aim of achieving faster growth than our industry and becoming a Market Driven Product Leader.”

Click to open the full Financial Statement Release (pdf).